Time to Renew?

With a blink of an eye, five years is over and you're starting to get the notices reminding you that your mortgage is up for renewal. You may have conveniently gotten your renewal papers in the mail from your lender offering you a rate that's lower than what you were paying before (this is because current mortgage rates are at a historical low). It's easy to just sign on the dotted line and mail it back, but if you stop and think about it, by signing these papers, you're locking yourself into yet another long term contract. If you've done this before, you're not alone. Research has shown that most consumers stay with the same lender when renewing a mortgage. Statistics also show that people who spend a bit of time shopping around during renewal time, tend to save more in the long run. Do you have enough information to make an educated decision about your mortgage? What are some of the options you have? In order to find the right mortgage product for you, you'll need to ask yourself what your long-term goals are. Is it to be mortgage free as soon as possible? Or do you need increased cash flow for upcoming expenses like starting a family or saving for a child's post-secondary fund? Mortgage options can really provide the flexibility you need to meet your long-term goals. With a little knowledge and the help of a mortgage broker, you could end up saving a lot of money in the long-run. Mortgage Transfer This option is best for renewal time, especially if you have a high ratio mortgage (value of mortgage exceeds 80% of your home). A mortgage transfer allows you to move your existing mortgage to a new lender. There are minimal costs involved since lenders will primarily absorb the cost to process a mortgage transfer. You will still need to provide all of the documents required for a mortgage application and there may be an appraisal cost (depending on the loan to value - calculated based on the size of your mortgage divided by the assessed value of your home). Mortgage Rate Increase and Blend This option should be used with caution and is relevant if you have more than 3 years left on your mortgage term and you're worried that mortgage rates will go up soon. The concept of this option is to allow you to increase the amount of your mortgage. The increased amount will be at the current mortgage rate, which is then blended with your existing mortgage. Mortgage Rate Blend and Extend On top of the ability to increase your mortgage amount with the blend and increase option, some lenders allow you to extend your mortgage as well. For example, if you have three years left, you may have the option to extend your mortgage to a new 5 year term. Again, this option should be used with caution. With all these options and others, it's important to have a real understanding of what each entails. A mortgage specialist can really help you in understanding the options available and which ones could be helpful in achieving your financial goals. Don't walk into a mortgage renewal blindly. Contact us today and we'll find you the mortgage product that's right for you.

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Vancouver mortgage broker with “lower” fees
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I have had a in interesting case with a returning client who came to me recently for help with his mortgage.  As a mortgage broker in Vancouver, it is necessary to be creative in making solutions work for my clients, which currently can often involve secondary or private lending solutions.  This was a case where such creativity would be necessary.Read More

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First Time Home Buyers Mortgage Broker Tips And Tricks
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Among the services I provide to my clients, I consider myself to be a "first-time home buyer mortgage broker".  As a first time home buyer mortgage broker, I know how difficult it is to get into the real estate market, particularly in Vancouver, and it brings me a particular amount of job to help someone get past the challenges if being a first time home buyer.

I have recently completed an e-book and will be launching it soon.  I believe it will be very helpful for not just first-time home buyers, but for anyone who is not as knowledgeable in residential mortgage lending, about how to make your home buyer mortgage broker application appealing to a mortgage lender.

As a sneak preview, here are three tips on improving your mortgage application as a first-time home buyer.

3 Home Buyer Mortgage Broker Tips

  1. Take advantage of the home-buyers plan to fund your down-payment.  This program is not technically ONLY for first-time home buyers, but all first-time home buyers are eligible.  Under the plan, you can borrow up to $25,000 from your RRSP for the purchase of an owner-occupied residence.  If you and your spouse are both applying, then you can withdraw $25,000 each. It is a loan, so it has to be paid back over 15 years (or 1/15th of the loan will be added to income for that year).  However, there is no withholding when you withdraw it, it does not have to all be declared as income on any given year, and you don't even have to use all of it for down-payment!  You can use it for any purpose that you need it for. A good mortgage broker, like myself, can help you with some of the finer details and complex situations that often arise from these situations.
  2. Make sure you pay your bills on time. If you have a high balance on your loan, or you have a lot of debt, those also have a significant negative impact on your credit score, but you can get the bills down and there is no record of your high debt levels.  However, when you miss a bill payment, it stays on your credit bureau for 6-7 YEARS.  This not just negatively impacts your credit score, but lenders look at this when assessing risk, and they have been particularly uncompromising and (unreasonable, paranoid, strict...and other words that I cannot put in print) in the last few years.  While you likely do not have to wait 6-7 years to become bankable if you have had gone through a period of bad credit, the less negative credit on the bureau, the better. At least make the minimum required payments and you will go a long way to making yourself appealing to them.
  3. Having no credit is just as bad as having bad credit. Many people feel that not requiring credit should prove your ability to pay your bills and should be good evidence of credit-worthiness.  This is not how mortgage lenders think.  If you currently do not have any credit, then you do not have any documentation that you are an acceptable credit risk, and no matter how strong your income is, you will have difficulty obtaining a prime mortgage approval.  Make sure you have at least 3 different credit facilities in your name.  (Secondary credit cards in a spouses name are not considered acceptable for establishing your credit).

I am excited to launch my home buyer mortgage broker e-book soon, in which I go into much greater detail and give many different ideas to help home buyers prepare for home ownership, but as a mortgage broker in Vancouver, you are welcome to contact me in the meantime to discuss your circumstances and see if there are any options for you.

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Good news regarding OSFI rule changes
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This is just a quick note to let viewers know that IF you are one of the people with 20% or more down-payment and are in a position that the new OSFI rule changes affect your pre-qualification, that I can extend the current guidelines into the new year by up to 120 days provided that I have an application and am able to get a pre-approval in place with a lender for you before January 1.Read More